Lizz Sokolowski

Broker, ABR

Prevent Mortgage Fraud
 

Becoming a homeowner can be one of the most exciting moments in a family?s lifetime. One of the keys to success is getting an affordable home loan with fair terms and reasonable costs. Consumers should know that some loans are riskier than others. Simply being aware of the predatory lending problem is the first step in protecting your investment.

According to Fannie Mae, mortgage fraud has increased five-fold in the past 10 years. Unsuspecting home buyers who aren?t familiar with an area?s property values can be victimized by scam artists who have bought a property at a bargain-basement price and have made minor cosmetic changes to sell the home for much more than it?s worth. People with blemished credit can also fall prey to unscrupulous individuals who pose as real estate agents or mortgage brokers, offering promises of a new home and mortgage qualification. These buyers end up assuming a loan they can?t afford, and the lender forecloses.

The majority of predatory lending occurs within the ?subprime market,? oftentimes involving people with poor credit histories and high debt. Although the availability of these loans can help lower-income families achieve homeownership, the problem lies with those lenders that take advantage of vulnerable buyers.

Here are some warning signs of a predatory loan from the consumer brochure published by the National Association of REALTORS?? brochure ?Shopping for a Mortgage? Do Your Homework First: How to Avoid Predatory Lending.?           

Copyright NATIONAL ASSOCIATION OF REALTORS?, used with permission.

Consumers can protect themselves by checking out lenders with the Better Business Bureau, educating themselves on the financial risks involved and taking the time to carefully shop for a loan. 

First-time homebuyers in Illinois may qualify for low-cost loans through the Partnership for HomeOwnership?s Rural Initiative, Quincy Initiative and HomePower Mortgage Assistance programs. Learn more at www.pfho.org.      

 

 

source:  illinoisrealtor.org